Fewer Farms, More Cows Show Up in 2012 Census

6/7/2014 7:00 AM
By Charlene M. Shupp Espenshade Special Sections Editor

A lot can happen in five years. In the detailed results of the 2012 Agriculture Census released May 2, the overarching trend since 2007 has been toward fewer farms with more cows.

But Pennsylvania bucked that trend compared with many of its fellow “dairy states,” holding onto its smaller dairies.

California remains the top dairy state with nearly $6.9 billion in annual milk sales, followed by Wisconsin with nearly $5 billion, New York with $2.4 billion and Idaho with $2.3 billion. Pennsylvania comes in fifth with milk sales at nearly $2 billion.

However, examine how the states got to their production levels, and things start to look markedly different.

More than half of California and Idaho’s milk production comes from farms with at least 1,000-cow dairies. In Idaho, the data indicate that 65 percent of that state’s milk production comes from herds with at least 2,500 milk cows.

New York follows the larger dairy trend, with 31 percent of its sales coming from 1,000-cow dairies.

Turn to Pennsylvania, and the statistics show a different story. The dominant force for milk production is not the large-scale dairies, but farms of more moderate size.

About half of Pennsylvania’s milk sales comes from farms ranging from 50 cows up to 200 cows. And 20- to 49-cow herds pulled in 16 percent of milk sales.

New York added 32 farms in the large scale, or more than 1,000 cows, category between 2007 and 2012. In contrast, Pennsylvania added only four new 1,000-or-more-cow dairies. That growth came from either startups or expansions.

According to Jim Dunn, Penn State dairy economist, there are some reasons for this. First is topography and road layout. He said large farms often have to go significant distances to acquire the needed acreage, either owned or rented, to support large-scale dairy operations.

In certain areas of Pennsylvania, the rolling hills and mountains can make a difference in available tillable acreage. Then there’s the impact of Plain Sect communities that operate nonelectric dairies.

“Amish and Mennonites find a way to make small scale work,” Dunn said. They also have a longer-term commitment to farming as a part of their cultural heritage.

Andrew Novakovic, agriculture economist at Cornell University, said it’s also interesting to dig further into the numbers.

He pointed out that the dairy industry in southeastern Pennsylvania is large and stable, but dairying in the northern tier has been declining.

Novakovic also wonders what effect Marcellus shale might be having on dairy in that region.

Dunn, however, points out that dairy farm numbers were declining in Pennsylvania’s northern tier before the advent of the shale-gas industry.

Novakovic said that southeastern New York’s dairy industry is also declining but “western New York is the one of the hottest dairy areas on the planet.”

As for larger farms, Novakovic said, “New York is unusual among the traditional dairy states in that it got an early jump on developing very large-scale, intensive farms. Those are the farms that are keeping New York in the No. 3 or No. 4 position.”

Like Dunn, Novakovic said that Pennsylvania’s greatest challenge is the fact that many farms do not have the ability to expand.

The census did show some movement between 2007 and 2012 in the number of dairy farms in each state.

Idaho saw a net gain of 123 in the number of dairy farms. California, on the other hand, lost 10 percent of its farms with more than 500 cows. Dunn said he believes many of those California operations relocated to Idaho.

Water has not been an issue in Idaho like it has been in California, Dunn said, adding that the other popular relocation state has been New Mexico.

Wisconsin’s dairy industry has historically looked like Pennsylvania with smaller dairies. But farm numbers in Wisconsin dropped 18 percent, Dunn said, especially in the 20- to 99-cow categories. More than 25 percent of those farms were lost, mostly because they left the business, although some grew larger.

Dunn also said that you can not discount the “Greek yogurt factor” in New York state for many of these farms. First, he said, it’s keeping milk in New York state, ultimately giving Pennsylvania farms additional opportunities to market their milk.

As for the future of the dairy industry, only time will tell what farms will look like.

There’s little doubt that the unprofitable years of 2009 and 2011 prompted many farms to leave the dairy industry. But Dunn said he believes the farms remaining in the industry are better prepared for the future.

“I think most Pennsylvania farms that made it through are doing better and have cleaned up their balance sheets,” he said.

But Dunn also cautioned that the export market is a much larger player in milk prices than it once was, “making us more vulnerable to changes in exchange rates, which was what 2009 was all about. The dollar rose so far, we were priced out of the market.”

Novakovic also touched on the rise of smaller dairies in much of the Northeast. In addition to Amish farms, “Many Northeastern states have seen smaller-sized farms increase due to young professionals seeking to change their lifestyle, start a small farm or CSA, and take advantage of the local foods culture,” he said.

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